Economic Update: February 2021

by Blake Whiteley Last updated on March 08, 2021

As the second month of the year has wrapped up, we have seen the continuation of the reddit army and the FOMO (fear of missing out) trade, the ongoing effect of the pandemic and its interaction with economies and financial markets, and the appearance of interest rate risk in both equity and fixed income markets.

*Equity Indices - FTSE Global Indices in CAD, Bonds - Barclays Global Aggregate Canadian Float Adjusted Bond Index based on end-of-day data for the Total Return Index as at market close February 26th, 2021


Volatility was present in the bond markets and spilled over to equity markets as yields have started rising due to the prospect of an economic boom with the belief that pent-up demand will be unlocked as restrictions loosen.

In addition, strong growth expectations also come inflation expectations. Central banks have committed to extended periods of low rates, however, high inflation may force their hands to raise rates in tandem.

FOMO Trading

Understanding investor psychology can be a very power tool in your investing arsenal to keep your risk within your acceptable levels and to avoid following the herd in engaging in activities such as speculating on meme stocks. We all have a bias to regret aversion bias which can lead us to purchasing certain stocks, simply because we fear we will regret not having that exposure if it were to shoot up in value.

When these instances present themselves, it is important to take a step back and think about the basics. When evaluating opportunities, first consider the risk-return trade off. If the opportunity looks too good to be true, it is likely due to the risk associated with the opportunity. High return potential is typically associated with higher risk. Another important element is to think long-term; this is because fundamentals will dominate in the long-term whereas in the short-term there can be bouts of irrational exuberance. If taking a higher risk make sense in the long run, and you can afford the higher swings, then it might fit in your portfolio. But if we have already set our risk tolerance and are within it, then there is often no need to take added risks – especially when we look at the long-term picture.

Final Thoughts

The economic outlook remains positive as the vaccination roll out continues globally and as restrictions are lifted and as fiscal stimulus programs continue. We continue to believe that if you stick to the basics, automate your contributions, hold a diversified portfolio and rebalance strategically you will be on the right track to reach your financial goals.

A simple, rules-based approach helps us to avoid the biases we are susceptible to. We have built our portfolio management process on this fundamental idea – control what you can (costs and process) and then stick to the plan. Those who do, will reach their financial goals, one step at a time.

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Economic Update: January 2021

by Blake Whiteley Last updated on February 04, 2021

As the first month of 2021 comes to a close, we look back on an eventful one. President Biden took office, rioting took place at the Capitol, wild swings have taken place in select securities and as per the new normal the pandemic continues to take center stage as we monitor the pace of vaccinations and daily cases. 

*Equity Indices - FTSE Global Indices in CAD, Bonds - Barclays Global Aggregate Canadian Float Adjusted Bond Index based on end-of-day data for the Total Return Index as at market close January 29th, 2021.


Followers of the financial news will have seen headlines of a handful of stocks that have shot up in value astronomically as retail investors were placing active bets against institutional investors causing a “short squeeze” for those securities. The hype for these stocks has come primarily from online forums rather than business fundamentals, and although the action receives plenty of coverage in the news, it is important to note that there are significant risks carried with speculating on non-fundamental and isolated events.

Digital currencies have also been gaining in popularity and have been receiving greater coverage as institutional investors are allocating capital to these assets. Digital currencies are very interesting as they are uncorrelated to other financial markets and could provide portfolios with diversification benefits as a result. However, like the stocks receiving media attention cryptocurrencies are also subject to wild swings and are not as easily available to purchase compared to other asset classes. As this asset class matures, it may become a more viable option for a greater number of investors. 

President Biden was inaugurated on the 20th and as he takes office his immediate mandate will be combatting the pandemic with vaccine distribution and fiscal stimulus as near-term priorities. On the monetary front the Fed has maintained its policy rate and continues to signal that we can expect rates to remain low as the year progresses to stimulate the economy. Most developed governments around the world will approach 2021 with the same philosophy and do as much as possible to fuel their economies until we are through this pandemic.

Final Thoughts

Human behaviour and biases have the availability to move markets significantly in the short-term, however fundamentals are what drive long-term performance. Investors who have tuned out the noise during the two most recent bear markets, held diversified portfolios and that have rebalanced strategically have been well served. We continue to believe in this strategy and with that said we encourage the use of pre-authorized contributions to tune out the noise and to stick to your plan.

Stay safe!

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Economic Update: Year in Review 2020

by Blake Whiteley Last updated on January 11, 2021

Unprecedented, social distancing, lockdown, work from home, zoom, new normal. These are just a few buzz words that can be used to describe the year. It was a year in which the only story in the spotlight was the novel coronavirus COVID-19 and the havoc that it wreaked on country’s citizens, economies, and even financial markets. Despite a pandemic and severe volatility earlier on in the year, investors that kept calm enjoyed a profitable year in their investment portfolios.

The year provided many opportunities for us to re-design our habits and routines. Now is a great time to re-think and review our financial habits and we will discuss important lessons from 2020 that investors can benefit from long-term.

*Equity Indices - FTSE Global Indices in CAD, Bonds - Barclays Global Aggregate Canadian Float Adjusted Bond Index based on end-of-day data for the Total Return Index as at market close as at December 31, 2020


When we look back on 2020, we will all remember a year of lockdowns, masks, and social distancing. Given these exceptional times as an investor, looking back, it’s important to reflect on the major developments. Markets started a steep decline in February and the decade plus bull run finally came crashing down to a bear market. Central banks and fiscal policy makers reacted swiftly, and what resulted was the shortest bear market in history lasting only 33 days. Then, across asset classes, markets closed the year in the green broadly and even amongst the pandemic. There are many important lessons that can be garnered from this:


1. Markets are forward looking

While increasing data and news was being released about the novel coronavirus at an increasing pace during Q1, markets had been absorbing the data and asking “what are the long-term implications of this health crisis?” Markets began their descent in late February, Premier Ford declared a state of emergency on St Patrick’s day in Ontario, and just a few days later markets hit a bottom on March 23rd before starting their recovery. This is an important reminder that markets do not care about what’s happened in the past and what’s happening today, they are only concerned about what the future will look like. It’s important to remind yourself that your thoughts are not unique and are therefore already priced in.

2. Investing is a Behavioural Discipline 

There are countless biases that investors are prone to exhibit unconsciously; by sticking to your plan you can avoid falling victim to these pitfalls and increase the likelihood of achieving your financial goals. One of the worst calls an average investor can make is the decision to move to cash during periods of elevated volatility as they are worried that the sky is falling. This is a classic example of market timing and there is a lot of evidence that shows that market timing strategies are not profitable ex-post. They are so difficult to get right – and selling can often happen close to the bottom – and the investor typically only buys back in after the market has recovered its losses.

Often investor questionnaires ask how you would react if the market lost significant steam. Times like Q1 are a good time to re-visit those questions and reflect on your answers to those questions. If you said you would buy because securities are effectively on sale at a discount, or even if you answered, “I would do nothing” and essentially stick to your plan, it’s so important to follow through on these statements as they are great strategies.

3. Stick to the Basics

Global diversification, pre-authorized contributions and a well-defined rebalancing strategy will help you achieve your financial goals. If you have these in place the behavioural strategy of tuning out noise and maintaining a long-term mindset will serve you well.

Final Thoughts

As 2021 progresses we hope to see economies safely re-open. We believe that those who apply the lessons from 2020 to their investing moving forward will be successful.

We wish you a healthy New Year!

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Economic Update: November 2020

by Blake Whiteley Last updated on December 07, 2020

November 2020 brought an upcoming change in the oval office, major developments related to COVID-19 vaccines, and an uptick in coronavirus cases in the northern hemisphere. Market sentiment has improved with these developments, but as unexpected as 2020 has been, it’s important to continue to expect volatility and mentally prepare for it.

Index Performance Chart_November 2020

*Equity Indices - FTSE Global Indices in CAD, Bonds - Barclays Global Aggregate Canadian Float Adjusted Bond Index based on end-of-day data for the Total Return Index as at market close as at November 30, 2020


The largest story in the US this month was President-elect Joe Biden taking the victory in the presidential election. The democrats took the House and the republicans won the Senate, meaning that bipartisanship will be necessary to pass bills; the typical time lags associated with the political process will likely stay at play during President-elect Biden’s first term in office.

The announcement came several days after the final ballot was cast. During the waiting period, volatility was relatively subdued; we would have expected an uptick in volatility due to the uncertainty that a delay in announcing a winning candidate would bring, however that was not the case. This is yet another example of how challenging it can be to design trading strategies that attempt to time markets.


On the global front, the largest story has been continued advancements in COVID-19 vaccine trials. AstraZeneca, Pfizer, and Moderna have all reported successful trials of their vaccine candidates with impressive results for a first-generation vaccine. The markets have responded positively to these announcements as they will aid in the gradual lifting of COVID-19 restrictions globally.

Although there has been progression with vaccines, we are seeing a continued trend upwards in daily infections, and with increasing cases comes increasing restrictions. These restrictions are going to be data driven; as the case curve flattens, we should see restrictions lift.

Final Thoughts

Long-term investors who have ignored headlines and any voices telling them to sell have been served well. Even better yet, those who have continued to add to their portfolio while markets dipped would have benefited even more.

Even with the uncertainty that 2020 has brought, we continue to believe that investors who stick to the basics (invest often, global diversification, strategic rebalancing, do not time markets) will be much more likely to reach their financial goals than investors who are finnicky and sell out of fear.

With that being said, thank you for reading and we hope that you have a safe and happy holiday season.

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Economic Update: October 2020

by Blake Whiteley Last updated on November 06, 2020

2020 has provided an endless number of stories for news agencies. It’s no surprise that volatility in equity markets was present throughout global markets in the lead up to the Presidential election. In addition to the approaching election, rising coronavirus cases, vaccine developments, and global government responses were key drivers of market sentiment in the month of October.

Index Performance_October 2020

*Equity Indices - FTSE Global Indices in CAD, Bonds - Barclays Global Aggregate Canadian Float Adjusted Bond Index based on end-of-day data for the Total Return Index as at market close as at November 3 2020

US Election

At the time of this writing, a Presidential winner is still undetermined, but what will matter most in November is how quickly and decisively a winner is declared, and whether a single party will have control of the Senate. The longer the election drags out, the more uncertainty it will create and the more volatility we can expect.

If there is a change in presidents, a Biden presidency would mean proposed large scale policy change from tax reform to foreign policy. If the democrats fail to take the Senate, they’ll struggle to pass bills and appoint judges.


Volatility has typically subsided once the dust from elections settle, but given the ongoing challenges of the pandemic, uncertainty remains a big part of the story. A positive development in the storyline in October is the forward momentum in clinical trials of a vaccine. The availability of a successful vaccine, or even the likelihood of one, should have a significant positive effect on global stability.

Global economies have responded to the economic burden of the pandemic by continuing their expansionary fiscal and monetary policies. These policy tools are positive for stocks and will play an important role in a nations GDP growth as countries recover from the pandemic.

Final Thoughts

Even with restrictions tightening globally we can see a recovery gaining momentum. As an investor it can be tough to tune out the noise, but by looking past the turbulent news cycle you’ll be able to maintain discipline and achieve your financial goals. Keeping a well-diversified portfolio bolsters your investments against the volatile effects of these macro-economic and political moments. We expect the road forward to be a bumpy one and as always, we expect those who have and stick to a plan will be successful.

Thanks for reading and we hope you stay safe!

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Economic Update: September 2020

by Blake Whiteley Last updated on October 07, 2020

September saw volatility return to financial markets as daily new cases of the coronavirus trended upwards, and fears of rolling back reopened economies increased.  Yet, despite the bout of volatility, Q3 has brought another quarter of positive gains.

Equity Indices - FTSE Global Indices in CAD, Bonds - Barclays Global Aggregate Canadian Float Adjusted Bond Index based on end-of-day data for the Total Return Index as at market close 30 September 2020.

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Economic Update: August 2020

by Blake Whiteley Last updated on September 03, 2020

Now that August has ended, we’re reflecting on a truly remarkable moment in financial market history: the S&P 500 has set new records during the month amidst an ongoing pandemic. More evidence of an economic recovery has been showing up in the data, but there are of course still sources of uncertainty present. We continue to believe that investors who remain cool headed and un-emotional will be well-served as we progress.

Equity Indices - FTSE Global Indices in CAD, Bonds - Barclays Global Aggregate Canadian Float Adjusted Bond Index based on end-of-day data for the Total Return Index as at market close 31 August 2020.

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Economic Update: July 2020

by Blake Whiteley Last updated on August 12, 2020

Markets continued their ascent through the month of July shrugging off the worries that exist during an ongoing pandemic. Central banks were able to take a back seat throughout the month and monitor the status of their re-opening plans. While the financial market rally is encouraging, we do expect volatility on the path forward and we expect investors who maintain discipline to be rewarded on the way down this long-term path.

Equity Indices - FTSE Global Indices in CAD, Bonds - Barclays Global Aggregate Canadian Float Adjusted Bond Index based on end-of-day data for the Total Return Index as at market close 05 August 2020 for FTSE Global Indicies and 31 July 2020 for Barclays Global Aggregate Canadian Float Adjusted Bond Index.

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Economic Update: June 2020

by Blake Whiteley Last updated on July 07, 2020

Stocks have been on a great run over Q2; US markets posted its best quarterly gain since 1987. While the Canadian market had a solid quarter of its own as well. As markets approach pre-pandemic levels, we can see a recovery is underway. The path forward will have it bumps and, with the uncertainty that currently exists, we can expect volatility to persist.

*Equity Indices - FTSE Global Indices in CAD, Bonds - Barclays Global Aggregate Canadian Float Adjusted Bond Index based on end-of-day data for the Total Return Index as at market close 01 July 2020


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Economic Update: May 2020

by Blake Whiteley Last updated on June 05, 2020

The month of May marked the start of the gradual reopening of the domestic and global economy, slower growth of new COVID-19 infections, and continued government stimulus, all of which boosted investor confidence throughout the month. However, moving forward, there is still  a lot of global economic and political uncertainty and this highlights the need for diversification and exposure to different asset classes, countries, and sectors.

*Equity Indices - FTSE Global Indices in CAD, Bonds - Barclays Global Aggregate Canadian Float Adjusted Bond Index based on end-of-day data for the Total Return Index as at market close 29 May 2020.

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